Denali Therapeutics Inc. (Nasdaq: DNLI), a biopharmaceutical
company developing a broad portfolio of product candidates
engineered to cross the blood-brain barrier (BBB) for
neurodegenerative diseases, today reported financial results for
the third quarter ended September 30, 2022, and provided business
highlights.
“This is an exciting time in neuroscience and rare disease drug
development,” said Ryan Watts, Ph.D., Denali's Chief Executive
Officer. “Now as a late-stage development company with a portfolio
of seven therapeutic candidates designed to cross the blood-brain
barrier, we remain focused on bringing treatment options to people
living with neurodegenerative and lysosomal storage diseases. Our
recent progress highlights the potential of our Transport Vehicle
platform and portfolio, and we look forward to sharing additional
program and data updates.”
Third Quarter and Recent Program
Updates:
TV-ENABLED PROGRAMS
DNL310 (ETV:IDS): MPS II (Hunter syndrome)
- In August 2022, Denali presented new, interim data from the
ongoing Phase 1/2 study at the 2022 SSIEM Annual Symposium
demonstrating achievement of healthy normal levels of heparan
sulfate measured in cerebrospinal fluid (CSF) in all participants
in the Phase 1/2 study, including those with high pre-existing
anti-iduronate-2 sulfatase antibodies; improvement or stabilization
in clinical symptoms and function in most participants as reported
by both clinicians and caregivers; and a safety profile with up to
85 weeks of dosing, which was similar to standard of care.
- The Phase 2/3 COMPASS study continues to enroll up to 54
participants with Hunter syndrome with and without neuronopathic
disease; upon completion of the ongoing Phase 1/2 study, and
together with data from the global COMPASS study, this combined
data package will potentially support registration.
TAK-594/DNL593 (PTV:PGRN): Frontotemporal
Dementia-Granulin (FTD-GRN)
- In November 2022, Denali announced interim results from Part A
of the Phase 1/2 study evaluating TAK-594/DNL593 (PTV:PGRN) in
healthy subjects. Single doses of DNL593 resulted in substantial
increases in CSF progranulin levels suggesting brain delivery of
DNL593 was achieved and has the potential to address progranulin
deficiency, which drives disease progression in people living with
FTD-GRN. Single doses of DNL593 were also generally well tolerated,
based on blinded safety analysis.
- These data support dosing in participants with FTD-GRN in Part
B of the study.
TAK-920/DNL919 (ATV:TREM2): Alzheimer’s Disease
(AD)
- Dosing is ongoing in the Phase 1 single ascending dose study in
healthy volunteers in the Netherlands.
SMALL MOLECULE PROGRAMS
BIIB122/DNL151 (LRRK2 inhibitor): Parkinson’s disease
(idiopathic and LRKK2-positive)
- In October 2022, Denali and Biogen announced initiation of the
global Phase 3 LIGHTHOUSE study of BIIB122 in up to 400
participants with Parkinson's disease and a confirmed LRRK2
pathogenic variant.
- Dosing is ongoing in the global Phase 2b LUMA study in up to
640 participants with early-stage Parkinson’s disease.
SAR443820/DNL788 and SAR443122/DNL758 (RIPK1
inhibitors): Neurodegenerative and peripheral
inflammatory diseases
- In November 2022, Sanofi presented Phase 1 healthy volunteer
data on SAR443820 at the Annual Northeast Amyotrophic Lateral
Sclerosis (NEALS) Meeting demonstrating a safety profile that was
well-tolerated after single ascending doses and 14 days of multiple
ascending doses taken orally once or twice daily, with favorable
pharmacokinetic properties and excellent CNS penetrance. Maximum
median inhibition of pS66-RIPK1 levels in blood cells from the
study participants ranged between 93% to 99% after multiple doses,
reflecting marked RIPK1-target engagement. The data further support
the ongoing global Phase 2 HIMALAYA study in participants with
amyotrophic lateral sclerosis (ALS). A Phase 2 study of SAR443820
in multiple sclerosis is also planned.
- Sanofi continues to conduct a Phase 2 study of the peripherally
restricted RIPK1 inhibitor SAR443122 (eclitasertib) in cutaneous
lupus erythematosus; a Phase 2 study in ulcerative colitis is also
planned.
DNL343 (eIF2B activator): ALS
- Denali plans to present data from the ongoing Phase 1b study of
DNL343 in participants with ALS at the International Symposium on
ALS/MND being held virtually, December 6 – 9, 2022.
- Based on Phase 1 data and ongoing blinded Phase 1b data, Denali
has initiated planning for a late-stage study in ALS in 2023.
Discovery Programs
Denali continues to advance a broad preclinical portfolio
including programs enabled by the Enzyme Transport Vehicle, the
Antibody Transport Vehicle, and the Oligonucleotide Transport
Vehicle, and several small molecules engineered to cross the
blood-brain barrier and intended as potential treatments for
patients with neurodegenerative diseases.
Recent Corporate Updates
In October 2022, Denali raised net proceeds of approximately
$296.2 million through a public offering of its common stock.
Participation in Upcoming Investor
Conferences
- Credit Suisse 31st Annual Healthcare Conference, November 7 -
10
- Stifel 2022 Healthcare Conference, November 15 - 16
- Jefferies London Healthcare Conference, November 15 - 17
- Evercore ISI 5th Annual HealthCONx Conference, November 29 -
December 1
- Jefferies 5th Annual Denver Biopharma Summit, December 14
-15
Third Quarter
2022 Financial Results
For the three months ended September 30, 2022, Denali reported a
net loss of $103.3 million compared to a net loss of
$84.6 million for the three months ended September 30,
2021.
Collaboration revenue was $3.6 million for the three months
ended September 30, 2022, compared to $5.3 million for the
three months ended September 30, 2021. The decrease in
collaboration revenue of $1.7 million for the three months ended
September 30, 2022, compared to the comparative period in the prior
year was primarily due to a decrease in revenue from our
collaboration with Takeda as the preclinical performance
obligations are now satisfied under the Takeda Collaboration
Agreement, partially offset by an increase in revenue from our
collaboration with Sanofi pertaining to Alzheimer's Disease service
performance.
Total research and development expenses were $87.8 million for
the three months ended September 30, 2022, compared to
$71.6 million for the three months ended September 30, 2021.
The increase of approximately $16.2 million was primarily
attributable to an increase in ETV:IDS program external expenses
due to progress in the clinic in 2022, LRRK2 program external
expenses primarily due to the $5.0 million clinical milestone
payment owed to Genentech, which was triggered upon commencement of
dosing in the global phase 3 LIGHTHOUSE study of BIIB122/DNL151 by
Biogen, and personnel-related expenses, including employee
compensation and stock-based compensation, driven primarily by
higher headcount and equity award grants. Additionally, there were
increases in external expenses related to the progression of other
programs in Denali's portfolio, including the eIF2B and PTV:PGRN
programs, the advancement of the TV platform as well as Denali's
continued overall investment in developing a broad pipeline. These
expense increases were partially offset by decreases in ATV:TREM2
program external expenses due to timing of clinical activities and
increases in cost sharing reimbursements.
General and administrative expenses were $23.3 million for the
three months ended September 30, 2022, compared to
$19.3 million for the three months ended September 30, 2021.
The increase of approximately $4.0 million was primarily
attributable to an increase in personnel-related expenses,
including employee compensation and stock-based compensation
expenses, driven by higher headcount and equity award grants.
Additionally, there were increases in other general corporate
services costs including IT services and subscriptions, taxes,
travel-related expenses, and consulting and legal professional
services expenses.
Cash, cash equivalents, and marketable securities were
approximately $1.11 billion as of September 30, 2022.
About Denali Therapeutics
Denali Therapeutics is a biopharmaceutical company developing a
broad portfolio of product candidates engineered to cross the
blood-brain barrier (BBB) for neurodegenerative diseases. Denali
pursues new treatments by rigorously assessing genetically
validated targets, engineering delivery across the BBB and guiding
development through biomarkers that demonstrate target and pathway
engagement. Denali is based in South San Francisco. For additional
information, please visit www.denalitherapeutics.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements expressed or implied in this press
release include, but are not limited to, statements regarding
Denali's progress, business plans, business strategy, product
candidates, planned preclinical studies and clinical trials and
expected milestones; plans, timelines and expectations regarding
DNL151 for the treatment of Parkinson's disease in collaboration
with Biogen, including the ongoing Phase 2b LUMA study and the
ongoing Phase 3 LIGHTHOUSE study; plans, timelines and expectations
regarding DNL310, including the presentation of data from the
ongoing Phase 1/2 study and the potential for the DNL310 combined
data package to support registration of DNL310; plans, timelines
and expectations regarding DNL788 of both Denali and Sanofi,
including with respect to expected enrollment for a Phase 2 trial
in ALS; plans, timelines and expectations regarding DNL758 of both
Denali and Sanofi, including with respect to the planned Phase 2
study in ulcerative colitis; plans, timelines and expectations
regarding DNL593, including Phase 1/2 trial dosing and initial
clinical data from the Phase 1 portion of such trial; plans,
timelines and expectations regarding DNL343, including the
presentation of initial data from the ongoing Phase 1b study of
DNL343 in ALS; and statements made by Denali’s Chief Executive
Officer. Actual results are subject to risks and uncertainties and
may differ materially from those indicated by these forward-looking
statements as a result of these risks and uncertainties, including
but not limited to, risks related to: any and all risks to Denali’s
business and operations caused directly or indirectly by the
ongoing COVID-19 pandemic; risk of the occurrence of any event,
change or other circumstance that could give rise to the
termination of Denali’s agreements with Sanofi, Takeda, Biogen or
any of Denali’s other collaboration agreements; Denali’s transition
to a late stage clinical drug development company; Denali’s and its
collaborators’ ability to complete the development and, if
approved, commercialization of its product candidates; Denali’s and
its collaborators’ ability to enroll patients in its ongoing and
future clinical trials; Denali’s reliance on third parties for the
manufacture and supply of its product candidates for clinical
trials; Denali’s dependence on successful development of its
blood-brain barrier platform technology and its programs and
product candidates; Denali’s and its collaborators' ability to
conduct or complete clinical trials on expected timelines; the risk
that preclinical profiles of Denali’s product candidates may not
translate in clinical trials; the potential for clinical trials to
differ from preclinical, early clinical, preliminary or expected
results; the risk of significant adverse events, toxicities or
other undesirable side effects; the uncertainty that product
candidates will receive regulatory approval necessary to be
commercialized; Denali’s ability to continue to create a pipeline
of product candidates or develop commercially successful products;
Denali's ability to attract, motivate and retain qualified
managerial, scientific and medical personnel; developments relating
to Denali's competitors and its industry, including competing
product candidates and therapies; Denali’s ability to obtain,
maintain, or protect intellectual property rights related to its
product candidates; implementation of Denali’s strategic plans for
its business, product candidates and blood-brain barrier platform
technology; Denali's ability to obtain additional capital to
finance its operations, as needed; Denali's ability to accurately
forecast future financial results in the current environment;
general economic and market conditions; and other risks and
uncertainties, including those described in Denali’s most recent
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (SEC) on August 8, 2022 and Denali’s future
reports to be filed with the SEC. The forward-looking statements in
this press release are based on information available to Denali as
of the date hereof. Denali disclaims any obligation to update any
forward-looking statements, except as required by law.
Denali Therapeutics Inc.Condensed
Consolidated Statements of
Operations(Unaudited)(In thousands,
except share and per share amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Collaboration revenue: |
|
|
|
|
|
|
|
Collaboration revenue from customers(1) |
$ |
184 |
|
|
$ |
5,285 |
|
|
$ |
94,805 |
|
|
$ |
36,143 |
|
Other collaboration revenue |
|
3,375 |
|
|
|
— |
|
|
|
3,375 |
|
|
|
4 |
|
Total collaboration revenue |
|
3,559 |
|
|
|
5,285 |
|
|
|
98,180 |
|
|
|
36,147 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development(2) |
|
87,786 |
|
|
|
71,559 |
|
|
|
266,621 |
|
|
|
197,477 |
|
General and administrative |
|
23,259 |
|
|
|
19,319 |
|
|
|
66,959 |
|
|
|
57,300 |
|
Total operating expenses |
|
111,045 |
|
|
|
90,878 |
|
|
|
333,580 |
|
|
|
254,777 |
|
Loss from operations |
|
(107,486 |
) |
|
|
(85,593 |
) |
|
|
(235,400 |
) |
|
|
(218,630 |
) |
Interest and other income,
net |
|
4,187 |
|
|
|
1,005 |
|
|
|
8,114 |
|
|
|
3,310 |
|
Loss before income taxes |
|
(103,299 |
) |
|
|
(84,588 |
) |
|
|
(227,286 |
) |
|
|
(215,320 |
) |
Income tax expense |
|
— |
|
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
Net loss |
$ |
(103,299 |
) |
|
$ |
(84,588 |
) |
|
$ |
(227,313 |
) |
|
$ |
(215,320 |
) |
Net loss per share, basic and
diluted |
$ |
(0.84 |
) |
|
$ |
(0.69 |
) |
|
$ |
(1.85 |
) |
|
$ |
(1.77 |
) |
Weighted average number of
shares outstanding, basic and diluted |
|
123,473,390 |
|
|
|
121,742,067 |
|
|
|
123,054,889 |
|
|
|
121,309,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________________
(1) Includes related-party collaboration revenue from a customer
of $0.2 million and $2.9 million for the three and nine
months ended September 30, 2022, respectively, and
$0.9 million and $2.5 million for the three and nine
months ended September 30, 2021, respectively.(2) Includes expense
for cost sharing payments due to a related party of
$1.4 million and $3.8 million for the three and nine
months ended September 30, 2022, respectively, and an offset to
expense from related-party cost sharing reimbursements of
$1.2 million and $5.3 million for the three and nine
months ended September 30, 2021, respectively.Denali
Therapeutics Inc.Condensed Consolidated Balance
Sheets(Unaudited)(In thousands)
|
September 30, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
118,615 |
|
$ |
293,477 |
Short-term marketable securities |
|
987,440 |
|
|
571,930 |
Cost sharing reimbursements due from related party |
|
— |
|
|
1,226 |
Prepaid expenses and other current assets |
|
32,471 |
|
|
30,601 |
Total current assets |
|
1,138,526 |
|
|
897,234 |
Long-term marketable
securities |
|
— |
|
|
425,449 |
Property and equipment,
net |
|
41,692 |
|
|
38,865 |
Operating lease right-of-use
assets |
|
31,271 |
|
|
30,743 |
Other non-current assets |
|
16,117 |
|
|
11,871 |
Total assets |
$ |
1,227,606 |
|
$ |
1,404,162 |
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
7,539 |
|
$ |
4,779 |
Cost sharing payments due to related party |
|
1,443 |
|
|
— |
Accrued compensation |
|
13,253 |
|
|
19,013 |
Accrued clinical and other research & development costs |
|
21,701 |
|
|
15,887 |
Accrued manufacturing costs |
|
16,732 |
|
|
9,955 |
Other accrued costs and current liabilities |
|
2,395 |
|
|
2,857 |
Operating lease liabilities, current |
|
7,068 |
|
|
5,453 |
Related-party contract liability, current |
|
290,516 |
|
|
292,386 |
Contract liabilities, current |
|
23 |
|
|
27,915 |
Total current liabilities |
|
360,670 |
|
|
378,245 |
Related-party contract
liability, less current portion |
|
276 |
|
|
1,295 |
Contract liabilities, less
current portion |
|
— |
|
|
3,398 |
Operating lease liabilities,
less current portion |
|
54,978 |
|
|
58,554 |
Other non-current
liabilities |
|
379 |
|
|
379 |
Total liabilities |
|
416,303 |
|
|
441,871 |
Total stockholders'
equity |
|
811,303 |
|
|
962,291 |
Total liabilities and
stockholders’ equity |
$ |
1,227,606 |
|
$ |
1,404,162 |
|
|
|
|
|
|
Investor Relations Contact:
Laura Hansen, Ph.D.Vice President, Investor Relations(650)
452-2747hansen@dnli.com
Media Contact:
dna CommunicationsAngela Salerno-RobinSenior Vice President,
Media Relations, Healthcare+ 1 212 445
8219Asalerno-robin@dna-comms.com
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